[By Geoffrey Manne and Joshua Wright. Cross-posted at TOTM]
Our search neutrality paper has received some recent attention. While the initial response from Gordon Crovitz in the Wall Street Journal was favorable, critics are now voicing their responses. Although we appreciate FairSearch’s attempt to engage with our paper’s central claims, its response is really little more than an extended non-sequitur and fails to contribute to the debate meaningfully.
Unfortunately, FairSearch grossly misstates our arguments and, in the process, basic principles of antitrust law and economics. Accordingly, we offer a brief reply to correct a few of the most critical flaws, point out several quotes in our paper that FairSearch must have overlooked when they were characterizing our argument, and set straight FairSearch’s various economic and legal misunderstandings.
We want to begin by restating the simple claims that our paper does—and does not—make.
Our fundamental argument is that claims that search discrimination is anticompetitive are properly treated skeptically because: (1) discrimination (that is, presenting or ranking a search engine’s own or affiliated content more prevalently than its rivals’ in response to search queries) arises from vertical integration in the search engine market (i.e., Google responds to a query by providing not only “10 blue links” but also perhaps a map or video created Google or previously organized on a Google-affiliated site (YouTube, e.g.)); (2) both economic theory and evidence demonstrate that such integration is generally pro-competitive; and (3) in Google’s particular market, evidence of intense competition and constant innovation abounds, while evidence of harm to consumers is entirely absent. In other words, it is much more likely than not that search discrimination is pro-competitive rather than anticompetitive, and doctrinal error cost concerns accordingly counsel great hesitation in any antitrust intervention, administrative or judicial. As we will discuss, these are claims that FairSearch’s lawyers are quite familiar with.
FairSearch, however, grossly mischaracterizes these basic points, asserting instead that we claim
“that even if Google does [manipulate its search results], this should be immune from antitrust enforcement due to the difficulty of identifying ‘bias’ and the risks of regulating benign conduct.”
This statement is either intentionally deceptive or betrays a shocking misunderstanding of our central claim for at least two reasons: (1) we never advocate for complete antitrust immunity, and (2) it trivializes the very real—and universally-accepted–difficulty of distinguishing between pro- and anticompetitive conduct.